The calculations below outline how an intrinsic value for
AU Optronics
is arrived at by discounting future cash flows to their present value using the 2 stage method.
We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.

The current share price of
AU Optronics
is above its future cash flow value.

Often investors are willing to pay a
premium
for a company that has a high dividend or the potential for future growth.

PRICE RELATIVE TO MARKET

We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for
AU Optronics's
earnings,
growth
and
assets
is considered below, and whether this is a fair price.

Price based on past earnings

Are
AU Optronics's earnings available for a low price, and how does
this compare to other companies in the same industry?

High Growth Checks

AU Optronics's earnings are expected to decrease over the next 1-3 years, this is not considered high growth.

AU Optronics's revenue is expected to decrease over the next 1-3 years, this is not considered high growth.

Past and Future Earnings per Share

The accuracy of the analysts who estimate the future performance data can
be gauged below. We look back 3 years and see if they were any good at
predicting what actually occurred. We also show the highest and lowest estimates
looking forward to see if there is a wide range.

Past performance checks

We assess
AU Optronics's performance over the past 5 years by checking for:

Has earnings increased in past 5 years? (1 check)

Has the earnings growth in the last year exceeded that of the
Electronic
industry? (1 check)

Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)

Is the Return on Equity (ROE) higher than 20%? (1 check)

Is the Return on Assets (ROA) above industry average? (1 check)

Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)

The above checks will fail if the company has reported a loss in the most recent
earnings report. Some checks require at least 3 or 5 years worth of data.
AU Optronics
has a total score of
1/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Management

Management is one of the most important areas of a company. We look at
unreasonable CEO compensation, how long the team and board of directors have
been around for and insider trading.

CEO

PaulPeng

AGE

59

TENURE AS CEO

3.3 years

CEO Bio

Mr. Shuang-Lang Peng, also known as Paul, has been the Chief Executive Officer of AU Optronics Corp. since November 1, 2015. Mr. Peng served as the President of AU Optronics Corp. since January 1, 2012 until October 31, 2015. Mr. Peng served as President of Display Business Operation at AU Optronics Corp. since January 1, 2012. Mr. Peng oversees the TV Business Group and IT Display Business Group. He served as an Executive Vice President of Display Business Operation at AU Optronics Corp. since 2008. He served as an Executive Vice President of Global Business at AU Optronics Corp. since April 2008. He serves as a Director of AUO Crystal Corp. He served as General Manager of the TV Business Group and Information Technology Display Business Group at AU Optronics Corp. and its Senior Vice President since 2007 until March 2008. He was Head of IT Display Business Group at Au Optronics Corp. since December 1, 2005 and served as its Vice President from 1998 to 2007. He oversaw the Desktop Display, Notebook PC Display and General Display business units. Since 2002, Mr. Peng was the General Manager of AUO's SuZhou module plant from 2002 to 2004 where he successfully and efficiently set up the plant. Prior to joining AUO, he worked as Manager of material and production department at BenQ's Malaysia branch. He has been the Chairman of Au Optronics Corp. since May 11, 2015. He serves as the Chairman of the Board of Directors of Taiwan Nano Electro-Optical Tech, BriView (Hefei) Co., Ltd. and BriView (Xiamen) Corp. He has been a Director of AU Optronics Corp. since June 2010. He has been a Director of Qisda Corporation since July 4, 2017. Previously, he served as a Director of Qisda Corporation. Mr. Peng holds an MBA Degree from Heriot-Watt University, U.K in 1995.

CEO Compensation

Insufficient data for Paul to compare compensation growth.

Insufficient data for Paul to establish whether their remuneration is reasonable compared to companies of similar size in United States of America.

Management Team Tenure

Average tenure and age of the
AU Optronics
management team in years:

3.3

Average Tenure

50

Average Age

The tenure for the AU Optronics management team is about average.

Management Team

Paul Peng

TITLE

Chairman & CEO

AGE

59

TENURE

3.3 yrs

Michael Tsai

TITLE

President

AGE

54

TENURE

3.3 yrs

Benjamin Tseng

TITLE

Chief Financial Officer

AGE

50

TENURE

3.3 yrs

Wei-Lung Liau

TITLE

Chief Technology Officer

AGE

47

TENURE

0.4 yrs

Julia Chao

TITLE

Head of IR Department

Sean Chen

TITLE

Vice President of Corporate Development Office

AGE

49

TENURE

3.3 yrs

Amy Ku

TITLE

Chief Sustainability Officer

TENURE

1.1 yrs

Tien-Yu Lin

TITLE

VP & GM of Mobile Solutions Business Group

Board of Directors Tenure

Average tenure and age of the
AU Optronics
board of directors in years:

News

Simply Wall St News

Company Info

Description

AU Optronics Corp. researches, develops, produces, and sells thin film transistor liquid crystal displays and other flat panel displays. The company operates through two segments, Display and Solar. The Display segment designs, develops, manufactures, assembles, and markets flat panel displays for use in televisions (TVs), TV sets, and other related products; desktop monitors; mobile PCs, such as notebooks and tablets; mobile phones; and commercial and other applications, including displays for automobiles, industrial PCs, automated teller machines, point of sale terminals, pachinko machines, medical equipment, and others. This segment serves original equipment manufacturing service providers; and brand companies. The Solar segment manufactures and sells solar materials, including ingots, solar wafers, and solar modules, as well as provides technical engineering and maintenance services for solar system projects. This segment sells its ingot and solar wafer products primarily to solar cell manufacturers; and solar modules to installers, solar system integrators, property developers, and other value-added resellers. The company also engages in the renewable energy power generation; repairing and sale support of TFT-LCD modules, as well as sale support of solar-related products; injecting and stamping parts; manufacture and sale of molds, light guide plates, liquid crystal products, backlight modules, and related parts, as well as precision plastic and metal parts; IP related business; design, development and sales of software and hardware for health care industry; manufacture, assembly, and sale of automotive parts; manufacture and sale of motorized treadmills; and planning, design, and development of construction for environmental protection and related project management. It operates in the People’s Republic of China, Taiwan, Japan, Singapore, and internationally. AU Optronics Corp. was founded in 1996 and is headquartered in Hsinchu, Taiwan.

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